Trump’s World Liberty Flags Coordinated Attack as USD1 Stablecoin Depegs

USD1 Stablecoin slipped below its $1 peg on Monday in what World Liberty Financial described as a coordinated attack on the protocol. The Trump-backed firm also assured holders that the stablecoin is fully backed 1:1 with GENIUS-Act-compliant reserves. 

USD1 Stablecoin Dip Comes Amid Coordinated Attack Claim

TradingView data shows that the USD1 stablecoin briefly dropped to $0.9934 but has since rebounded to reclaim its dollar peg. World Liberty Financial, the issuer of the stablecoin, acknowledged the issue in an X post stating that several accounts belonging to its co-founders were hacked. It also said that influencers had been paid to spread doubt about the project.

This development comes just days after the inaugural WLFI Forum, which held last week. The team also claimed that short positions were placed against the platform’s native token, WLFI. They characterized the actions as an attempt to induce panic and profit from volatility. The attempt was not successful, according to the team.

The project highlighted the USD1 Stablecoin’s mint and redeem mechanism in its statement. It said the token was still fully backed 1:1. The model helped stabilize trading conditions, the team said.

Zach Witkoff, World Liberty Financial’s co-founder, also addressed the depeg, noting that the stablecoin is 100% backed and 100% verifiable. “USD1 was built to set a new standard: genius compliant, fully backed, and radically transparent. We are proud to be the most transparent stablecoin in the market,” he added.

Deleted Binance Retweet Sparks Brief Market Panic

In an X post, analyst Wise Advice provided additional details on market activity. The analyst pointed out a deleted retweet about new USD 1 trading pairs on Binance, which was a panic trigger. The deletion of this tweet was a concern among traders. There was, however, minimal structural stress.

No whale sales above $50,000 were recorded during the event. The analyst highlighted that there were no major liquidity withdrawals. There were 70 small swaps on Solana, with most of them below $10,000.

There were also no significant Ethereum transactions related to the token. Supply metrics remained unchanged. The supply of USD1 remained at 2.1 billion tokens, and the supply of WLFI remained at 99.9 billion tokens.

The USD1 stablecoin is among the fastest-growing, hitting a $5 billion market cap last month even as World Liberty Financial pushes for a bank charter. CoinMarketCap data shows the market cap has dropped to around $4.8 billion, ranking behind USDT, USDC, USDe, and DAI in terms of market capitalization. 

A bank charter would enable World Liberty Financial to custody its stablecoin reserves. However, the firm’s application continues to face resistance from Democrats such as Elizabeth Warren, who have raised concerns about Trump’s ties to the firm.